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Don't Let a Background Check
Knock Out Your Candidacy

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Eileen P. Gunn Special to The Wall Street Journal

Updated April 15, 2008 7:10 p.m. ET

Forget about Big Brother. Your next prospective employer is likely to take an uncomfortably close-up look at you.

In this post-9/11 and corporate-scandal age, "employers want to know exactly who's working for them," says Mark Esposito, a managing partner in the financial-services practice at executive-recruiting firm Christian & Timbers. So companies are checking more often and digging deeper into the professional and personal lives of potential employees.

Last year, 80% of employers did criminal-background checks on potential hires, up from 51% in 1996, according to the Society for Human Resource Management, and 35% did credit checks, up from 19% in 1996. In addition, 79% checked previous work history. For top-level positions, employers asked for as many as 10 references, not the four or six they might have wanted before Sept. 11, 2001, says Mr. Esposito.

There are abundant anecdotes and statistics illustrating why companies are being so careful. There were more than 18,500 arrests for embezzlement in the U.S. in 2002, the most recent numbers available from the Federal Bureau of Investigation. Meanwhile, Christian & Timbers looked at 7,000 executive resumes that same year and found exaggerated or flat-out false information on 23% of them.

Kenneth Lonchar resigned his chief financial officer position at Veritas Software in 2002 when it came to light that he didn't have the Stanford University M.B.A. he said he did. Bausch & Lomb denied its chief executive Robert Zarella his annual bonus when it made a similar discovery about him the same year.

Meanwhile, a proliferation of database services has made it easier than ever to ferret out both the little white lies and the whoppers. "You can get background checks for as little as $25 or $50 a person," says Louis Rovner, a psychologist in Los Angeles who advises businesses about terrorist psychology and other security issues. A company typically will check for criminal convictions and sometimes check driving records, even when driving isn't part of the job. For financial or security-related jobs, it might look at recent credit history, too.

But for top executives, the check won't stop there. The Fair Credit Reporting Act allows pre-employment checks on candidates who will earn more than $75,000 a year to dig deeper and go further back in time.

Greater Scrutiny

Kroll, a security-consulting firm in New York, screens C-level candidates for clients, "We'll ask each of the person's references for three others, so we can talk to people who haven't been prepped," says Peter Turecek, managing director of the company's business-investigations and intelligence division. They'll also look at civil-court records to see whether a person has sued or been sued a little too often.

Companies can't legally delve into your past without your consent, but in a still-tough employment market, job seekers are unlikely to risk putting themselves out of the running. A survey by Choicepoint, a company in Alpharetta, Ga., that does pre-employment screening, found that a majority of workers think that it's all right for employers to screen for criminal histories or professional misconduct, but feel that looking at civil lawsuits or credit-card usage is an invasion of privacy.

Julie Lucas had to get past a drug test and credit check to get her job as director of public relations at Teletech Holdings, in Englewood, Colo. "I had never [faced] this type of scrutiny. It was a little disconcerting," she says. "But [my job] does put me somewhat in the public spotlight, and, given the climate of these past few years, the corporate scandals and questionable, not to mention unethical, management decisions, it's not a bad decision to have a closer review of hires."

If you're a job seeker facing a background check, there are steps you can take to make sure no closeted skeletons take you out of the running for a great job.

Know what they'll find before they do.

Pam Dixon, executive director of the World Privacy Forum, a not-for-profit research group in Encinitas, Calif., recommends that higher-level managers engage a private investigator or a firm such as Kroll before beginning a job hunt to find out what potential employers might dig up. "It's expensive, especially if you think you have a squeaky-clean record," she says. "But, these checks really do influence careers, so if you're an executive it's worth doing."

Tell them what they might find.

When Mr. Turecek first applied for a job with Kroll, he knew the firm would turn up the credit card he maxed out paying tuition for his last semester of graduate school, so he told the company about it. "I explained what the debt was and pointed out that even while I was job hunting I'd been making minimum payments on a regular basis," he says.

If you have a blemish and there's a simple explanation for it, then explain. Emmy Allgood, head of personnel at Borell Private Bank & Trust in San Mateo, Calif., says, "We know there can be mitigating circumstances. Maybe a former spouse left you with a lot of credit-card debt."

If you have a more serious black spot, say a conviction for marijuana possession, own up to it, but be able to show that you've made amends by getting counseling or doing related volunteer work (maybe educating teens about drugs).

Be proactive if something goes wrong.

Les Rosen, president of Employment Screening Resources, a screening service in Novato, Calif., cautions that even the most sophisticated databases make mistakes. "Everyone has what we call a computer twin, [someone] who has the same name and a similar date of birth that a computer can mistake for you," he says.

In addition, not all screening services are created equal. Beth Givens, director of the Privacy Rights Clearinghouse in San Diego, receives countless e-mails from people who lost out on job opportunities because of sloppy checks that used their names but overlooked qualifiers like middle initials or Social Security numbers. Or they'd unknowingly suffered from an identity theft that left a trail of bad credit or petty crimes in their name.

If you're turned down for a job because of something in your background check, the company is obligated by the Fair Credit Reporting Act to let you know. It's also supposed to give you a copy of the report, but this step is sometimes overlooked, especially at small and midsize companies.

Mr. Rosen and Ms. Givens both recommend being proactive if you've gotten as far as a pre-employment check and then never heard from the company again or received a rejection letter. After all, if the company is doing a check, it usually means you're a finalist, if not the finalist.

"They're probably dismayed that they came so close to letting a bad apple into their organization," Mr. Rosen says. "If it turns out that's not the case, and they can salvage the situation, they might be relieved." Call the company, he says, and ask for a copy of the report. If you see any mistakes, let them know right away. "Sometimes people still don't get the job, but at least you know the mistake is out there, and you can fix it before the next opportunity."